Opinions and Questions

Sunday, March 01, 2015

On Friday evening, I debated Dr. Iain Benson on whether "one’s religious convictions should play a significant role in how they conduct themselves in political affairs."

I took the negative side of the resolution, and below is my fifteen minute opening address to make the case for government neutrality in matters of religion.

There
is a scene in the 1971 film "Fiddler on the Roof" where the rabbi of a
poor, oppressed Jewish village in pre-revolutionary Russia is asked to
say few words about the Tsar. He responds, "A blessing for the Tsar? Of
course! May God bless and keep the Tsar... far away from us!"

It
is natural and appropriate for believers to have freedom OF
religion, and it is equally right and just that others should have
freedom FROM it. In this way, individuals are free to conduct
themselves according to their personal or shared
religious (or not) viewpoint.

But tonight's debate is not about
private behaviour. This evening we are discussing political affairs:
Using the power and influence of
one's public position to pressure others to conform to your creed's
mores, co-opting governmental institutions to serve sectarian ends, or
legislating on the basis of religion. These activities should be
rejected.

On the other hand, it would be foolish to suggest
that a public avowal of a particular faith
would disqualify an individual from an elected or appointed role in public
office. I propose that devout Catholics and ardent atheists are both welcome to fully
participate in public and political life. On their own time, those with religious
convictions can attend the church, synagogue, temple, or mosque of their
choice while serving any function in government or politics.

I
further propose that Catholics should not be forced to abide by the
strictures of
(say) Hinduism, and vice-versa. Both should be free to follow their
respective faiths. I, as an adherent of neither, would object to being
coerced into submitting to the dictates of either. In addition,
religious groups generally desire minimal
interference from governments in doctrinal affairs. Clearly, then, all
of us have a personal interest in opposing tonight's resolution. For
once one religion can impose its tenets upon the populace, there is
little to stop other faiths from doing the same if they gain political
power at a later date. Let us keep any religion - and therefore all
religions - at a safe distance from our political institutions.

The Supreme Court of Canada agrees. In 2004, it wrote: "As a general rule, the state
refrains from acting in matters relating to religion. It is limited to
setting up a social and legal framework in which [...] members of the
various denominations are able to associate freely in order to exercise
their freedom of worship."

This is a common theme in Canadian
jurisprudence. Eight years later, it also wrote: "State
neutrality is assured when the state neither
favours nor hinders any particular religious belief, that is, when it
shows respect for all postures towards religion, including that of
having no religious beliefs whatsoever."

I endorse
this sentiment, and I think many of you agree with it as well. I hope I
can convince the rest of you that this principle is the best means to
secure liberty and human flourishing. If I succeed, everyone here
tonight should agree that one’s
religious convictions should *not* play a significant role in how they
conduct themselves in political affairs.

This
does not mean we should dismiss any action on the basis that it might
be motivated by religious faith. As Barack Obama put it: "We are
under obligation in public life to
translate our religious values into moral terms that all people can
share, including those who are not believers."

On the thousands
of issues that politicians must negotiate, the world's major religions
are often silent, contradictory, or ambiguous. One's religion should not
play a significant role in political affairs because, for the vast
majority of political decisions, there is no clear religious course of
action. And in those cases where sacred scrolls do detail specific
punishments for particular misdeeds, we in Canada often cheerfully
disregard them - and this is as it should be. I am confident no one
supports the Biblical injunction that would force a woman to marry her
rapist. [Deuteronomy 22:28-29] While many here may disapprove of
adultery, none present would advocate killing those who cheat on their
spouses, as the Bible commands. [Leviticus 20:10]

In other
areas, religious and materialist philosophies each incorporate such
disparate perspectives that neither can claim to own a side of an issue.
Look at climate change. Some religious folk believe God
has a plan for humanity and would never allow us to go extinct, so we
may as well
strip mine the earth.
Others with a religious bent see themselves as stewards of Creation
and therefore feel a moral obligation to protect the environment.
Conversely, those with an entirely materialist viewpoint may believe their
financial self-interest lies with the continued development of
Canada's tar sands and
so vehemently argue against global warming. And many non-religious people view
rising sea levels as an existential threat to several island nations, and
are therefore impelled to advocate for a strong global carbon emissions
cap. One's politics cannot be determined by one's faith, or its absence.

The
same can be said of morality. I often hear that religion and ethics are
one and the same - indeed, that the source of all morals is religion,
or that an ethical life is impossible without the values
spelled out in some holy text. Though commonly repeated, it is easy to
see this is not the case.

It is undeniable that many deeply religious people commit
abominable acts such as covering up child abuse or detonating suicide bombs in
public areas.

It is also true, as most of you likely know
through personal
experience, that most non-believers
lead decent lives. I find it interesting that statistically, atheists
are significantly under-represented in prisons throughout North America.

The point is one's morality says nothing about the extent of their
belief, and one's piety implies nothing about their basic human decency.

And though many with deeply held religious convictions are highly
moral, the same cannot always be said of religious institutions. The
Reverend Martin
Luther King Jr., in
his Letter from a Birmingham Jail, was sharply critical. On racial segregation and discrimination, the most prominent and
important social issue of the time, he wrote: "In
deep disappointment I have wept over
the laxity of the church."

Perhaps the declining political
influence of religious institutions is not a bad thing. University of
London professor Stephen Law observed, “if declining
levels of religiosity were the main cause of…social ills, we should
expect those countries that are now the least religious to have the
greatest problems. The reverse is true.” According to the
Organization for Economic Co-operation and Development, those states in
the US with the best quality of
life are among the least publicly pious (such as Vermont
and New Hampshire). This generalizes globally. Democratic nations where
religion plays little role in political affairs, such as Sweden,
Norway, Japan, Australia, and the Netherlands, fare much
better on just about every sociological indicator of well-being.

All
individuals, including those who are active in political affairs, have
the right to make their own choices, but not to demand that others do
likewise. If you think homosexuality is wrong, don't have intercourse
with someone of the same sex. But criminalizing gay relationships or
opposing equal marriage is an affront to equality, justice, morality,
and human rights. Enforcing one's own religious strictures upon others
breeds societal ills.

That is why a politician should set aside
religious dictates when acting as a representative of the government to
shape public policy.

As a thought experiment, let's examine the consequences if religious beliefs truly dictated the laws of the land.

A parliament legislating according Catholic doctrine, for
example,
would ban the sale of condoms to men and the prescriptions for the pill
for women. If orthodox Jews were in power, they would outlaw the
consumption of all pork and shellfish. Jehovah's Witnesses would make
life-saving blood transfusions
illegal. A Hindu regime would outlaw eating beef, while a
government legislating according to Muslim morality would criminalize
the consumption of alcohol. Most of these would forbid working on the
Sabbath, though
there is some disagreement between them on when the Sabbath starts, and
indeed on which
day of the week it falls.

Can anyone genuinely argue
that life would be better with no birth control, no steak, no lobster,
arbitrary restrictions on life-saving medical procedures, a return to
the days of Prohibition, or no bacon? (Please, let us at least keep
bacon.)

But one need not resort to hypothetical situations. Where religion and politics meet, tragedy and injustice often follow.

In
Ireland in October 2012, Savita Halappanavar was pregnant and gravely
ill with a serious infection. Doctors refused her request for a
medically justified abortion because of a religiously motivated law that
forbade removing even a miscarried foetus, no matter the risk to the
mother's life. As a result, both mother and foetus died. This egregious
violation of a woman's basic human rights, and other recent examples,
are the direct result of religion's influence in politics.

In a secular democracy no Church can dictate legal,
social, or educational policy - and in return government does seek to
control the practice of religion, so long as those practices do not
interfere with the rights of others. As my father often said, "My right to swing my fist stops at the bridge of your nose."

The
principle of equality is evident when there is one law for all.
Injustice inevitably follows when the laws of the land are subject to a
theological veto, or when they apply one set of rules to the religious
(or to those of a particular sect), and another for everyone else.

Mohandas Gandhi rejected the principle of tonight's resolution. He said,
"If I were a dictator, religion and state would be separate. I swear by
my religion. I will die for it. But it is my personal affair. The state
has nothing to do with it. The state would look after your secular
welfare, health, communications, foreign relations, currency and so on,
but not your or my religion. That is everybody's personal concern."

To
maximize freedom for all, let us not inject politics into religion. Who
here
tonight wants the government to be ever more involved with the Church?
Does anyone want legislators or judges, whose expertise typically
resides outside of ecclesiastical matters, to be the final arbiter on
difficult religious and theological questions? I certainly do not. Do
you?

To maximize freedom for all, let us not inject religion into
politics. Because most of us have chosen at some point to use condoms
or go
on the pill; because chances are someone you know is better off because
they obtained a divorce from an
abusive spouse and are now happily remarried; because there are those
who have access to
medical benefits from their same-sex partners; because Professor Benson
and I are able to publicly
debate the role of religion in the political realm with neither of us
fearing any social or legal reprisals; for all these reasons, let us all
breathe a sigh of relief we do not live in a country run on the basis
of religious dogma, where any of these might not be possible or could
lead to incarceration. Instead, let us be
thankful that our laws and government are largely based on secular
principles of human experience, objective evidence, reason, and human
empathy
and compassion.

Finally,
there is a word to describe when religion dominates politics:
theocracy. I would like to give the last word to Professor Benson. From
his 2013 article: "Theocracy seems to corrupt religious proposition by
using
the instruments of coercion that are essential to law in service of
religions." I agree wholeheartedly - and therefore urge you, as well, to
prevent the corruption of religious faith by rejecting the proposition
that
one's religious convictions should play a significant role in how they
conduct themselves in political affairs.

Friday, February 20, 2015

Tickets are still available for my debate on Friday, February 27 on whether "One's religious beliefs should play a significant role in political affairs."

I am in the final stages of preparation and think it will be an interesting debate. As it is being organized by the Archdiocese of Toronto, it is likely that a significant majority of the audience will be Catholic, and have a predisposition to favour the arguments of my opponent, Iain Benson (a Catholic scholar).

It is my hope to persuade many of these people that it is in their interest to support government neutrality in matters of religion - that is, the secular stance.

Sunday, July 27, 2014

Since being surpassed as the second largest economy in the world (a position it held for over two decades) in 2010, it has fallen far behind China in nominal GDP, and will likely fall far further in the years to come.

There are two overriding factors determining this grim conclusion: debt and demographics.

Japan's national debt is over one quadrillion yen (ten trillion USD) - more than twice its GDP.

Debt servicing costs are projected to be over 23 trillion yen in 2014, while total tax revenues (after a major tax hike in the latest budget) will be 50 trillion yen. Thus nearly half of government
revenues go
straight to paying off interest on the debt. And this is with rock-bottom interest rates: as of July 25, 2014, Japan pays just 0.53% on ten year bonds (0.15% for five years and a stunning 0.06% for two).

On its face, Japan's financial situation is precarious.

Japan has been able to meet all debt payments and fund its deficits
at such low
rates of interest because its populace saves a significant portion of
its income, and funnels a large percentage of those savings into
Japanese bonds. Of large economies, Japan is an outlier in that the vast
majority (over 90%) of its national debt is held domestically.

Which is why Japanese demographics matters.

Japan is aging, perhaps faster than any other nation. According to the Japanese Statistics Bureau, the number of Japanese 65 years and older [Excel] will steadily increase for the next twenty years,
while the number of those aged between 15 and 64 declines, year after year. Using these numbers
as an (imperfect) proxy for retirees and workforce, the stage is set for an inevitable crunch. (The following scenario may happen tomorrow or in ten years, but there is no way to avoid this impending crisis.)

With fewer workers, barring a miraculous increase in productivity, GDP will flatten or fall. Aggregate wages in Japan will also decline (likely at a greater rate, as younger workers are paid
less than older ones) which will lead to lower overall savings. Since Japanese savings are the source of almost all purchases of Japanese
bonds, the Japanese government will no longer be able to fund its
ongoing deficits (41 trillion yen in 2012, with no significant decrease on the horizon), never mind its maturing debt, while paying virtually no interest.

Drastic spending cuts
and/or dramatic tax increases sufficient to eliminate the deficit (7.6% of GDP last year) in the near term would almost certainly plummet
the country into a severe recession. The economic downturn would lower tax revenues and raise government social program expenditures - thus returning Japan to a deficit position.

With an enormous and increasing debt, coupled with a flat or
declining GDP, Japan will one day (soon) reach a crisis point. As I see
it, Japan will have three options:

Default in part or in full on outstanding debt.

Raise the interest rates paid on government bonds.

Have the central bank print money to buy bonds at a (much) lower interest rate than the market demands.

I view an explicit default as very unlikely. Doing
so would destroy the wealth of the Japanese populace, who hold almost
all national debt. It would be both contrary to the national interest and political suicide.

Japan could raise interest rates, but this too is unlikely. Consider the effect of an increase of just half a percent on the interest rate Japan pays on its 10 year bonds. Even in the unlikely scenario that Japan runs balanced budgets
for the next decade, this small rate rise doubles what the country must pay in interest every year, resulting in a situation where over 80% of taxes collected will go solely to paying interest on the
national debt as bonds mature. This is clearly a recipe for national
bankruptcy, leading to scenario 1 (default), which Japan will go
to great lengths to avoid.

This leaves printing yen - having the central bank buy
bonds, in massive quantities, both to make up for the shrinking numbers
of people buying bonds and to keep interest rates near zero. Rapidly increasing
the money supply will lead to a rapidly depreciating currency. Since
Japan has been a net importer since 2011,
in the short run a lower yen will further deteriorate the country's
financial position, as they must pay more yen for its imports (primarily
energy products). Last year, Japan's trade deficit
was 13.8 trillion yen (US$137B) - with a rapidly depreciating currency,
the number of yen leaving the country will sharply increase. This is
not good for Japan.

There is one silver lining in this scenario, which
unfortunately comes with its own cloud. As the yen falls in value,
Japan's mighty manufacturing capabilities become more cost competitive
globally. This will improve Japan's balance of trade, and reduce one
major source of capital flight. But if Japan takes full advantage of a
weak yen to increase its exports, it will do so largely at the expense
of its neighbours, including Indonesia, Vietnam, Korea, and - especially
- China. Sino-Japanese relations are already deteriorating on multiple
levels, including territorial claims, historical grievances, increasing
militarization, and political rhetoric favouring nationalistic
fervour over regional and international cooperation. Currency devaluation would exacerbate these tensions. In addition, the yen is one of the most widely traded currencies globally, and markets around the world would be rocked by a sudden drop in the value of the yen. Given the current context, deliberately depreciating Japan's currency could lead to a much broader regional
economic or political conflict.

But let's set aside geopolitical and global currency market considerations and remain focused on Japanese economics. Devaluation of the yen will be considered a beggar thy neighbour tactic by other Pacific countries. Some will likely take steps to devalue their own
currencies in response, seeking to maintain their share of global imports. Thus Japan would suffer all the
negative effects of a weak currency (now shared with several regional nations) with few of the desired benefits. Any increase in Japanese
exports is likely to be limited and short lived due to the reactions of
other nations.

Thus Japan is trapped in a vise, largely of its own making. Both
its demographics and debt profile were foreseeable for decades, but
no effective remedial action was taken to counteract these trends. It
saddens me, because I lived in Japan (nearly twenty years ago now) and
have great admiration for its history, culture, and people. But with its
shrinking workforce, aging populace, enormous debt, and continuing
deficits, all roads lead economic disaster for Japan.

Twenty five years ago, Japan was a seemingly invincible economic colossus that struck fear in the hearts of businesses and industry
worldwide. Now, I believe its days of going bankrupt gradually are nearing their end.

I hope I'm wrong.

Postscript:

My argument is based on the following assumptions:

The average savings
rate of the Japanese worker will remain roughly the same. (This is a
conservative assumption, as historically it has been quite high compared
to other wealthy nations; if the savings rate changes, it is far more likely to
decrease than increase.)

The investment mix for Japanese savings
will not change substantially in the coming years. (Also a conservative view, as Japanese savers historically (and presently)
significantly overweight their portfolios with domestic bonds, which fund the national deficit and maturing debt.)

Japan will not accept large scale immigration to offset its declining workforce over the next two decades.

Japanese
real wages and productivity, already high by global standards, will not
increase dramatically over the next 20 years. They will do so, at best,
gradually - a few percentage points per annum.

As people retire, they will become net spenders, not savers.

International
investors will not significantly increase their purchases of Japanese
bonds at current interest rates.

Wednesday, May 28, 2014

Last year Apple was being widely criticized in the press for its practise of funneling billions of dollars to Ireland to minimize the taxes it paid. During the height of the controversy, an MBA classmate of mine (and current Apple employee) wrote, "Avoidance is not evasion. One is legal, the other isn't. If you want corporations to pay more tax, close the loopholes."

This led to an interesting discussion about the differences between legality and morality, and what role (if any) corporations play in the latter.

His first rationalization for Apple's behaviour was pointing out, quite accurately, that most global corporations minimize and defer their taxes through numerous tricks and schemes. If governments would just "close the loopholes", he proposed, corporations would pay more.Doing so, however, is not so simple. Businesses routinely threaten, browbeat,
cajole, and blackmail jurisdictions to create precisely the legal conditions that allow tax avoidance on a massive scale. Companies
such as Apple are in no way passive entities, merely following the
rules laid out for them. To say otherwise is inaccurate and perhaps
dishonest. Furthermore, while "Everyone else is doing it!" is an accurate observation, it is not a moral justification.

But why, he then asked, should there be a moral component to any corporate calculation? After all, "US corporations exist with basically a singular purpose, to increase shareholder wealth/value."This was covered in our MBA - Milton Friedman believed that anything a corporation did beyond maximizing profits was a deviation from its sole true purpose and supremely unethical. This included donations to charities, supporting basic scientific research, or contributing to general education at any level. Only if the expected return from such activities (for example, the favourable publicity resulting from sponsoring some worthy cause) exceeded other potential investments should a company consider doing so.

While presented in class as one perspective of many (and an extreme one at that), apparently it has been taken to heart by some.

This leads to a larger issue - when one fully optimizes on a single variable, everything else
falls by the wayside. Optimization is a powerful mathematical tool, but
there can be disastrous effects if it turns out that more than one
factor is significant. Maximizing farming biomass output per hectare in
isolation will ignore (for example) potential massive increases in water and
fertilizer inputs, leading to water table depletion and downstream pollution. Factories to this day tend to
pollute air, land and water when doing so is cheaper than paying a fine if
they are caught - despite the fact it is orders of magnitude cheaper to
contain toxic waste at its source than to clean it up once it has
diffused into the wider environs. (The weakness of environmental regulations and their lax enforcement are often significant factors for a company determining where it will build a large manufacturing facility.) This principle was brilliantly illustrated by
Edward Norton's character in Fight Club:

A new car built by my company leaves somewhere travelling at 60 mph. The
rear differential locks up. The car crashes and burns with everyone
trapped inside. Now, should we initiate a recall? Take the number of
vehicles in the field, A, multiply by the probable rate of failure, B,
multiply by the average out-of-court settlement, C. A times B times C
equals X. If X is less than the cost of a recall, we don't do one.

Perfect corporate logic. Horrific moral consequences.

Forbes magazine calls Friedman's call to maximize shareholder value to the exclusion of all other considerations "The world's dumbest idea", and notes its all too real results:

The corporate world is plagued by continuing scandals, such as the
accounting scandals in 2001-2002 with Enron, WorldCom, Tyco
International, Global Crossing, and Adelphia, the options backdating
scandals of 2005-2006, and the subprime meltdown of 2007-2008. Banks and
others have been gaming the system, both with practices that were shady
but not strictly illegal and then with practices that were criminal.
They include widespread insider trading, price fixing of LIBOR, abuses
in foreclosure, money laundering for drug dealers and terrorists,
assisting tax evasion and misleading clients with worthless securities.

Corporations do not exist in a vacuum. One cannot discard all considerations unrelated to maximizing profits merely because doing so may complicate a calculation. There is a social dimension because corporations (including Apple) derive enormous benefits from government expenditures:

Transportation infrastructure (airports, harbours, rail lines and roads) is generally built and maintained with tax dollars. Among other things, this allows corporations to ship products and move people around the globe cheaply.

Functional governments enforce the rule of law, including an independent judiciary to maintain consistent application and oversee the enforcement of contracts if necessary.

Municipal, regional, and national police forces create and maintain safe(r) environments for factories, workplaces, and security
of employees and tangible assets during and outside the working day.

Emergency response, such as fire and ambulance, are almost universally government funded and run services.

Most American Apple employees were educated in the US, in
government funded primary, elementary, secondary, and post-secondary
institutions.

One can see corporate influence on US tax policy by corporate taxes collected over time as a percentage of GDP. In the United States, corporations and individuals paid roughly the same amount in 1939 (actually, corporations paid slightly more - the last time this was the case). Ten years later, individuals paid 39% more. In 1959, individuals paid more than twice the taxes (2.14x) of corporations. This trend continues over the years - by 1979, individuals contributed more than three times what corporations did to government revenues; in 1999, it was nearly five times as much. In 2009, over 86% of the tax burden came from individuals. This trend cannot continue much further.

Corporations should include ethical considerations into their calculus - if for no other reason than enlightened self-interest. If
a sufficient number of large companies and wealthy individuals become as successful as Apple in
manipulating then exploiting the tax codes of various countries, our entire economic system will collapse into itself.

People in the developed world depend on corporations for so many crucial aspects of life - food, communication, drugs, equipments, products, and much else - that elements of corporate behaviour that jeopardize the stability, health, or longevity of societies in which they participate should be viewed as immoral. The problem is not just that corporations behave unethically (though
many do); it is that we (society) have created a system where harmful, detrimental corporate behaviour is implicitly (and in some cases explicitly) rewarded. The
system must change if we are to avoid a catastrophic implosion;
corporations are a single (major) player in a large, complex game.Perhaps we need to broaden the corporate mandate to
include more than making money for shareholders; perhaps enforceable and genuinely global agreements on taxation and regulation would minimize the "loopholes" so expertly exploited by multinationals. At a minimum, we need to start having the conversation.

Questions raised included spending during Canadian political campaigns, the limits of free speech, and whether organizations such as CSA and CFI Canada can and should embrace the religious who agree with the principles of secular governance.

If asked today, I would probably change my answer (ten minutes in) to the question about the federal Conservatives having an explicit anti-science agenda.

Overall, I am happy with the thoughtful and spirited exchange of ideas. Enjoy.

In the bad old days, pretty much every Canadian was
Christian (those that were already here were sent to residential schools because they weren't considered "real" Canadians; those that believed differently either weren't allowed in, were openly discriminated against, and/or were deemed disposable (by, for example, forced labour building rail lines)). Canada now boasts significant numbers of Jews, Muslims, Sikhs, Hindus, Buddhists, pagans,
Wiccans, and a growing percentage of individuals who adhere to no religion.

"Happy Holidays" as a generic greeting is a recognition that, until
you learn otherwise, it isn't necessarily accurate to wish your
conversation partner "Merry Christmas." Of course, if offered a seasonal greeting that isn't part of your cultural heritage, just respond in kind. It's simply being polite - a
quintessential (in stereotype, if not in reality) Canadian value. In no way is it accurate or reasonable to portray "Season's Greetings" as an attack on Christianity.

Christmas has been a secular consumerist event for decades. Many people
celebrate and love Christmas for entirely non-religious reasons. If a store doesn't erect a Christmas tree or manger display, it's a business decision
- not an ideological assault or anti-Christian
sentiment.

Using the term "war" is a clear example of overblown rhetoric. We're moving
from assuming that everyone celebrates Christmas to recognizing the
reality that many do, and some don't. No one is shunned. No one is hurt.
No one is maimed. No one is killed. No one is having their rights
infringed upon in any way. Where is the war? Because religious displays are
left to private homes and houses of worship instead of city hall? Because
Christmas iconography (including the "secular" kind, such as conifers
and sleighs) are merely prominent instead of universal?

To those incensed at the fading prominence of explicit Christmas greetings - get a sense of
perspective. Christmas is offensive to no one, but the phrase "War on Christmas" is to many. Direct your
passion, indignation, resources, money, and energy to the plenitude of
issues facing our society that need addressing. Don't waste your (and so
many other people's) time with this invented non-event.